ETA CPP Study Guide Questions and
Answers.
NABU, APF and FANF Answer- MasterCard implemented a new fee, the Network
Access and Brand Usage fee (NABU). And following right on the heels of the
MasterCard announcement, on July 1, 2009 Visa implemented their U.S. Acquirer
Processing Fee (APF).
Card brand dues and assessments Answer- In addition to Interchange, each card brand
includes additional fees based on the transaction amount and per transaction. These
fees are called dues and assessments and typically range from 0.105% - 0.45% on the
transaction amount [ $0.0025 - $0.04.] Like interchange, assessments are exactly the
same for all credit card processors and no processor can give you a lower rate or a
better deal on assessments.
AVS and switch fees Answer- The fee is charged when your business utilizes the
Address Verification Service to check that the address provided by a cardholder
matches the address on file with the credit card company.
Authorization fee Answer- The voice authorization fee applies when you use a
telephone dial-up service for transaction authorization. A fee is charged for each call
that is made. Voice authorization is useful in the event your terminal or software
malfunctions or your internet connection isn't working.
Batch fee Answer- A fee that is charged when you settle your daily transactions (also
known as the batch) with your credit card processor. If you have no credit card
transactions to settle on a particular day, you are not charged this fee.
Clearing and settlement fees Answer- clearing denotes all activities from the time a
commitment is made for a transaction until it is settled.
Chargeback and representment fees Answer- In short, a chargeback is a reversal of
funds transferred.
Statement or reporting fees Answer- Fees that are charged for receiving statements or
reports.
Rewards Cards Answer- A cashback reward program is an incentive program operated
by credit card companies where a percentage of the amount spent is paid back to the
card holder.
,Card Not Present transactions Answer- A card not present transaction (CNP, MO/TO,
Mail Order / Telephone Order, MOTOEC) is a payment card transaction made where
the cardholder does not or cannot physically present the card for a merchant's visual
examination at the time that an order is given and payment effected.
Quick Service Restaurants (QSR) Answer- a specific type of restaurant that serves fast
food cuisine and has minimal table service.
Emerging Markets Answer- countries in the process of rapid growth & industrialization
Level 1 Data Answer- Level I purchasing card data includes the same information
captured during a traditional credit card purchase transaction. This includes: total
purchase amount, date, merchant category code and supplier/retailer name.
Level 2 Data Answer- Level II purchasing card data includes the same information
captured at Level I, plus the following: sales tax amount, customer's accounting code,
merchant's tax ID number, applicable minority - and women-owned business status and
sales outlet ZIP code.
Level 3 Data Answer- Level III purchasing card data includes the same information
captured at Levels I and II, plus the following: quantities, product codes, product
descriptions, ship to ZIP, freight amount, duty amount, order/ticket number, unit of
measure, extended item amount, discount indicator, discount amount, net/gross
indicator, tax rate applied, tax type applied, debit or credit indicator and alternate tax
identifier.
Discount Rate (Credit/Debit) Answer- The discount rate is the fee paid by merchants to
credit card processors as a fee associated with accepting general-use credit cards
(such as Visa, MasterCard, American Express and Discover). Typically this fee runs
between 1 percent and 3 percent, depending on the nature of the transaction.
Daily or monthly discount Answer- With monthly discount, your processor deducts fees
from your account in one lump sum once a month. With daily discount, your processor
charges fees daily throughout the month as well as at the end of the month.
Surcharge Answer- A charge added to the usual cost
Billback Answer- Billback or bill back is an accounting service and/or suite of software
that is used for cost recovery.
ERR Rates Answer- Enhanced Rate Recovery Pricing. As a merchant business with an
ERR rate of 1.69% for your merchant account, you will be charged 1.69% for any
transaction that qualifies on The Interchange Table at 1.69% or below.
,Interchange Plus Answer- Interchange Plus pricing gets its name based on the fact that
the rate charged for the transaction comes straight from the Interchange table "plus" a
surcharge amount.
Tiered Answer- Tiered pricing gets its name from the fact that there are multiple tiers set
up to determine the price associated with the transaction.
Sales Volume Answer- The quantity or number of goods sold or services sold in the
normal operations of a company in a specified period.
Transaction Counts Answer- the total number of transactions that are processed within
a merchant account.
Average Ticket Answer- Average ticket is a metric that provides details on the average
amount of sales by a given customer. It is used by a range of businesses when
analyzing business performance and sales activity.
Authorization Fees Answer- The amount of money that is charged directly to an
individual merchant account each time communication is made between credit card
processing software (when the sale transaction is processed online, etc.) or point of
sale (POS) terminal (when the sale transaction is processed physically in person) and
the authorizing network.
Effective rate Answer- The effective rate of a credit card processing statement is the
total processing fees divided by total sales volume.
Batches Answer- Batch credit card processing is the practice of a merchant processing
all of its authorized credit card transactions for the day after the close of business or at a
time determined by the credit card processor.
Chargeback Activity Answer- A chargeback is a transaction reversal meant to serve as
a form of consumer protection from fraudulent activity committed by both merchants and
individuals.
PCI Compliance Answer- The Payment Card Industry Data Security Standard (PCI
DSS) is a set of security standards designed to ensure that ALL companies that accept,
process, store or transmit credit card information maintain a secure environment.
Internet Gateways Answer- a merchant service provided by an e-commerce application
service provider that authorizes credit card or direct payments processing for e-
businesses, online retailers, bricks and clicks, or traditional brick and mortar. The
payment gateway may be provided by a bank to its customers, but can be provided by a
specialized financial service provider as a separate service, such as a payment service
provider.
, Virtual Terminals Answer- the web version of a physical credit card terminal or Point-of-
Sale (POS) machine
Dial-up POS System Answer- Uses a dial-up connection to process payments
Gift and/or Loyalty cards Answer- Loyalty programs are structured marketing strategies
designed by merchants to encourage customers to continue to shop at or use the
services of businesses associated with each program.
Check conversion Answer- Check conversion is a reformatting service offered by
banking merchants. Check conversion allows banks to convert paper checks into
electronic ones and then send them to the appropriate receiving bank. The electronic
check is forwarded on via the automated clearing house (ACH).
Cash advances Answer- A cash advance allows you to use your credit card to get a
short-term cash loan at a bank or ATM. Unlike a cash withdrawal from a bank account,
a cash advance has to be paid back — just like anything else you put on your credit
card. Think of it as using your credit card to "buy" cash rather than goods or services.
ACH Answer- Automated Clearing House (ACH) is an electronic network for financial
transactions in the United States. ACH processes large volumes of credit and debit
transactions in batches.
The following information must be provided on the merchant application: Answer- -
business name (DBA)
- physical location address
- business telephone number
- Tax Identification Number (TIN)
- Employer Identification Number (EIN)
- Contact information
- Cardholder Storage
- Copy of the merchant's voided check or bank letter with account name, account
number and routing number
- A bank contact name and phone
Retail Answer- the selling of goods directly to the customer; face-to-face transaction
Restaurant Answer- an eating establishment where food and drink are being sold to
customers
Mail Order/Telephone Order (MOTO) or Internet Answer- the selling of goods online;
non-face-to-face transaction (ANY Card Not Present environment)
Supermarket Answer- large self-service retail store selling food and household goods
Lodging Answer- sleeping accommodations, furnished rooms to rent for the night
Answers.
NABU, APF and FANF Answer- MasterCard implemented a new fee, the Network
Access and Brand Usage fee (NABU). And following right on the heels of the
MasterCard announcement, on July 1, 2009 Visa implemented their U.S. Acquirer
Processing Fee (APF).
Card brand dues and assessments Answer- In addition to Interchange, each card brand
includes additional fees based on the transaction amount and per transaction. These
fees are called dues and assessments and typically range from 0.105% - 0.45% on the
transaction amount [ $0.0025 - $0.04.] Like interchange, assessments are exactly the
same for all credit card processors and no processor can give you a lower rate or a
better deal on assessments.
AVS and switch fees Answer- The fee is charged when your business utilizes the
Address Verification Service to check that the address provided by a cardholder
matches the address on file with the credit card company.
Authorization fee Answer- The voice authorization fee applies when you use a
telephone dial-up service for transaction authorization. A fee is charged for each call
that is made. Voice authorization is useful in the event your terminal or software
malfunctions or your internet connection isn't working.
Batch fee Answer- A fee that is charged when you settle your daily transactions (also
known as the batch) with your credit card processor. If you have no credit card
transactions to settle on a particular day, you are not charged this fee.
Clearing and settlement fees Answer- clearing denotes all activities from the time a
commitment is made for a transaction until it is settled.
Chargeback and representment fees Answer- In short, a chargeback is a reversal of
funds transferred.
Statement or reporting fees Answer- Fees that are charged for receiving statements or
reports.
Rewards Cards Answer- A cashback reward program is an incentive program operated
by credit card companies where a percentage of the amount spent is paid back to the
card holder.
,Card Not Present transactions Answer- A card not present transaction (CNP, MO/TO,
Mail Order / Telephone Order, MOTOEC) is a payment card transaction made where
the cardholder does not or cannot physically present the card for a merchant's visual
examination at the time that an order is given and payment effected.
Quick Service Restaurants (QSR) Answer- a specific type of restaurant that serves fast
food cuisine and has minimal table service.
Emerging Markets Answer- countries in the process of rapid growth & industrialization
Level 1 Data Answer- Level I purchasing card data includes the same information
captured during a traditional credit card purchase transaction. This includes: total
purchase amount, date, merchant category code and supplier/retailer name.
Level 2 Data Answer- Level II purchasing card data includes the same information
captured at Level I, plus the following: sales tax amount, customer's accounting code,
merchant's tax ID number, applicable minority - and women-owned business status and
sales outlet ZIP code.
Level 3 Data Answer- Level III purchasing card data includes the same information
captured at Levels I and II, plus the following: quantities, product codes, product
descriptions, ship to ZIP, freight amount, duty amount, order/ticket number, unit of
measure, extended item amount, discount indicator, discount amount, net/gross
indicator, tax rate applied, tax type applied, debit or credit indicator and alternate tax
identifier.
Discount Rate (Credit/Debit) Answer- The discount rate is the fee paid by merchants to
credit card processors as a fee associated with accepting general-use credit cards
(such as Visa, MasterCard, American Express and Discover). Typically this fee runs
between 1 percent and 3 percent, depending on the nature of the transaction.
Daily or monthly discount Answer- With monthly discount, your processor deducts fees
from your account in one lump sum once a month. With daily discount, your processor
charges fees daily throughout the month as well as at the end of the month.
Surcharge Answer- A charge added to the usual cost
Billback Answer- Billback or bill back is an accounting service and/or suite of software
that is used for cost recovery.
ERR Rates Answer- Enhanced Rate Recovery Pricing. As a merchant business with an
ERR rate of 1.69% for your merchant account, you will be charged 1.69% for any
transaction that qualifies on The Interchange Table at 1.69% or below.
,Interchange Plus Answer- Interchange Plus pricing gets its name based on the fact that
the rate charged for the transaction comes straight from the Interchange table "plus" a
surcharge amount.
Tiered Answer- Tiered pricing gets its name from the fact that there are multiple tiers set
up to determine the price associated with the transaction.
Sales Volume Answer- The quantity or number of goods sold or services sold in the
normal operations of a company in a specified period.
Transaction Counts Answer- the total number of transactions that are processed within
a merchant account.
Average Ticket Answer- Average ticket is a metric that provides details on the average
amount of sales by a given customer. It is used by a range of businesses when
analyzing business performance and sales activity.
Authorization Fees Answer- The amount of money that is charged directly to an
individual merchant account each time communication is made between credit card
processing software (when the sale transaction is processed online, etc.) or point of
sale (POS) terminal (when the sale transaction is processed physically in person) and
the authorizing network.
Effective rate Answer- The effective rate of a credit card processing statement is the
total processing fees divided by total sales volume.
Batches Answer- Batch credit card processing is the practice of a merchant processing
all of its authorized credit card transactions for the day after the close of business or at a
time determined by the credit card processor.
Chargeback Activity Answer- A chargeback is a transaction reversal meant to serve as
a form of consumer protection from fraudulent activity committed by both merchants and
individuals.
PCI Compliance Answer- The Payment Card Industry Data Security Standard (PCI
DSS) is a set of security standards designed to ensure that ALL companies that accept,
process, store or transmit credit card information maintain a secure environment.
Internet Gateways Answer- a merchant service provided by an e-commerce application
service provider that authorizes credit card or direct payments processing for e-
businesses, online retailers, bricks and clicks, or traditional brick and mortar. The
payment gateway may be provided by a bank to its customers, but can be provided by a
specialized financial service provider as a separate service, such as a payment service
provider.
, Virtual Terminals Answer- the web version of a physical credit card terminal or Point-of-
Sale (POS) machine
Dial-up POS System Answer- Uses a dial-up connection to process payments
Gift and/or Loyalty cards Answer- Loyalty programs are structured marketing strategies
designed by merchants to encourage customers to continue to shop at or use the
services of businesses associated with each program.
Check conversion Answer- Check conversion is a reformatting service offered by
banking merchants. Check conversion allows banks to convert paper checks into
electronic ones and then send them to the appropriate receiving bank. The electronic
check is forwarded on via the automated clearing house (ACH).
Cash advances Answer- A cash advance allows you to use your credit card to get a
short-term cash loan at a bank or ATM. Unlike a cash withdrawal from a bank account,
a cash advance has to be paid back — just like anything else you put on your credit
card. Think of it as using your credit card to "buy" cash rather than goods or services.
ACH Answer- Automated Clearing House (ACH) is an electronic network for financial
transactions in the United States. ACH processes large volumes of credit and debit
transactions in batches.
The following information must be provided on the merchant application: Answer- -
business name (DBA)
- physical location address
- business telephone number
- Tax Identification Number (TIN)
- Employer Identification Number (EIN)
- Contact information
- Cardholder Storage
- Copy of the merchant's voided check or bank letter with account name, account
number and routing number
- A bank contact name and phone
Retail Answer- the selling of goods directly to the customer; face-to-face transaction
Restaurant Answer- an eating establishment where food and drink are being sold to
customers
Mail Order/Telephone Order (MOTO) or Internet Answer- the selling of goods online;
non-face-to-face transaction (ANY Card Not Present environment)
Supermarket Answer- large self-service retail store selling food and household goods
Lodging Answer- sleeping accommodations, furnished rooms to rent for the night
